Insider

Insider Report March 2020

April 01, 2020 by Dave Michels

The Most Important Enterprise Communications News from March 2020

Events

Well, obviously, the big event this month was the coronavirus. Actually, the federal government was studying the pandemic in October 2019, but it took until March 2020 for it to be realized. The impact was sudden, and though the fear and spread of this virus will end, its consequences will be felt for decades.

The Most Important Enterprise Communications News from March 2020

Events

Though the swift stimulus has already been approved, this is far from over. Markets are fluctuating annual returns in a day. I believe we are far from the bottom. The COVID-19 disease is still spreading exponentially, and there’s no cure in sight. Some experts believe US hospitalizations have not peaked yet, and deaths will continue (ironically, overall death rates are down since everyone is staying home). US hospitalizations continue to increase with a peak forecast in May, but possibly as late as August.

The repercussions are broad. Organizations are now urgently dealing with work from home (WFH) and digital transformation. This is good for the communications industry, but it is hardly business as usual. On the other hand, a big part of the past 10 years has been enabling mobility, and now it is time to enable the nonmobile.

Nearly every major communications conference in March-June has been canceled or postponed. The lone exception was #Zoom20. The provider demonstrated its agility (as if we needed more evidence) by pivoting to a virtual event in just two days. Enterprise Connect was postponed until August. Most announcements can’t wait that long, so expect lots of news in April.

Few of us realized how quickly life around the world could change. It’s hard to remember how normal things were in early March. I was surprised when Five9 canceled its event, but it was the right thing to do. The economic impact of the coronavirus will be significant, as the pandemic shares similarities with both the Great Depression and the Mortgage Crisis of 2008. Here are a few predictions for the industry:

People will go back to the office, but WFH is not going away. Over the next few months, we will realize that many services continue to be as good or better without an office. It’s not just traditional work. Despite the growth of online education, traditional university enrollments have not declined — now they will. Currently, traditional schools are trying to convince us that they can be just as effective without a campus. The costs of office space and commuting will be carefully scrutinized going forward. Note that Shopify gave its employees $1k to outfit their homes for telework. Also, Stripe announced that it would hire 100 new engineers to form a fifth engineering hub — but not put them anywhere. Its new hub will be entirely remote. These are not temporary measures.
I expect we are at the beginning of a long slide in demand for commercial office space (as leases expire). It’s hard to imagine, but that’s what was said about the mall. This will have a domino effect, because real property is often used to secure borrowed funds.
Cash will become king. This coronavirus event will likely last for the remainder of 2020. The initial phase is fear and concern over health and safety. This will continue for at least a few months, but could last all year. Then comes our new economic reality: layoffs, unemployment, bankruptcies, and everything else associated with a recession (we are currently in the pregame). Previous recessions show recovery takes about 3 times longer than drawdown, so 27-36 months is a reasonable forecast. Recessions are normally associated with a regional event. We have never experienced a severe recession that impacts most of the world. We were in a growth-is-all-that-matters phase; recently, the industry switched to favoring profitability; and now we are entering a cash-to-survive phase. At least there’s increased demand for WFH solutions.
It’s reasonable to assume a significant increase in taxes on businesses as soon as this year. Governments around the world are spending trillions to shore up their economies — creating more debt in the process. Individual tax hikes are not viable in a recession, so there will be new taxes and fines on businesses — especially those with cash (FAANG). Two weeks ago France fined Apple €1.1bn for stifling competition. Also, the UK announced an intent to levy new taxes on big tech companies beginning April 1. The same will happen in the US. Last year Trump tweeted that Amazon should pay more taxes — it will and so will many others.

Of course, these are just a few of the ways enterprise communications will be impacted. The full list is much longer and still being created. For example, I expect a whole new level of previously unimaginable surveillance and public safety programs to be implemented. The $2T stimulus was extraordinary in speed and size, though it was notably missing networking infrastructure. It did not include funds for GB residential internet or upgrades to internet capacity, which now seems like a matter of urgency.

There’s also a powerful meme about the virus being a message from our planet. In a matter of weeks, we have seen record reductions in carbon emissions. “China’s coronavirus lockdown likely saved tens of thousands of lives by slashing air pollution from factories and vehicles,” according to a Stanford University scientist. The murky canals in Venice became clearer with fish even visible. For decades, we have traded science for hurricanes, tornadoes, floods, sea rise, drought, and fires because of a feared disruption to modern society. A cleaner future is now known to be possible. I expect there will be global initiatives around conservation and WFH. It’s not hard to imagine a near future where working in an office carries a stigma.

While closing businesses and schools was somewhat controversial, the all-clear will be much more subjective. The testing fiasco in the US means we have no objective data on virus spread. We only have lagging indicators such as hospitalizations and deaths.

The coronavirus has attacked the at-office status quo far more effectively than the enterprise communications industry. WFH transitioned from luxury/nice-to-have to a matter of safety and necessity over two weeks. The virus has legitimized cloud communications, WFH, and remote call center agents. It has also been a reminder of the importance of proper business continuance planning.

I think every enterprise communications vendor has responded with some type of program. Rather than catalog them myself, I will share Irwin’s list:

Blair created a longer list that also includes contact center providers.

There has been some concern about industry vendors profiteering from the situation. I disagree. Profiteering is responding to increased demand with increased prices. There is nothing wrong with responding to increased demand with increased information and programs. The world is being forced to embrace remote work and digital transformation — things that enterprise communications and collaboration vendors can facilitate. No shame, be a hero.

In addition to prospects, customers and employees also need attention. Some tech firms have committed not to do layoffs for 90 days, but demand spikes have spared most vendors from this concern. A bigger concern is taking care of existing customers. Ooma Networks, for example, has pledged not to stop any customer’s business or residential service for nonpayment for 60 days (also to waive late fees). This is associated with the FCC’s Keep Americans Connected Pledge.

I’ve said it before and I’ll say it again because it’s especially true in a time of crisis. Freemium works! Free trials are not the same. The problem with free trials is the time organizations take to implement, build consensus, and commit. Free trials ask organizations to pay before value is demonstrated. Freemium says pay if and only if additional features or support are valuable. Slack and Zoom are the poster children of freemium enterprise communications.

#Zoom20: Zoom hosted its first analyst event, which abruptly became a virtual event. What I consistently find most impressive about Zoom is its ability to react. This was my first event in March, and the only one that actually occurred. It was to occur four days before it didn’t. I think they set a high bar for virtual events. Also, I think they communicated five key themes during their event — four of which I believe to be true: Zoom is more than video, Zoom is agile, Zoom is just getting started, happiness is key, and security is top of mind.

Zoom is clearly more than video: They have all three core components of enterprise communications (voice, video, and meetings). Due to their strategic alignment with Slack, I think their chat app is undervalued. The company is clearly very agile. This is most visible with its telephony offer that continues to get new features and territories faster than I’ve ever seen. It’s hard to imagine that they are just getting started, but remember this company is only ten years old and still mostly associated with video. It is introducing new products, new markets, and new channels. They are also winning in happiness. Zoom does well with industry analysts (MQ), financial analysts (buy recommendations), consultants (SCTC uses it), employees (Glass Door), and customers (Peer Insights). It’s very hard to simultaneously win in all of these groups.

While I do agree that security is getting increased focus at Zoom, I disagree it is top of mind. Security is inherently at odds with simplicity and agility. I expect that Zoom will continue to have security issues, but it will also resolve them quickly. The Facebook data sharing and Zoom bombing issues are side effects of agility and simplicity. Both are easily solved, as was its web server issue a few months ago. I think of Facebook’s “move fast and break things.”

I will say Twitter seems enchanted by virtual backgrounds. Both Microsoft and Cisco have promised virtual backgrounds, but neither one has delivered them yet. For more on #Zoom20, see my post.

UPDATE: in the last 48 hours of March, there was a significant increase in identified vulnerabilities on Zoom. The provider has been accused of misleading customers on end-to-end encryption, leaking personal information, being vulnerable to malicious attacks on Windows, and more. Welcome to widespread use. Zoom is going to have a lot of splainin to do, quickly, to protect its goodwill and momentum.

Meetings

There were very few product announcements as the industry shifted to meeting unprecedented demand. I suspect every conferencing vendor saw some significant increases in interest and usage. I expect a big shift to education in April in order to ensure retention with best practices.

Yealink Collaboration Bar: Yealink introduced a Microsoft Teams certified collaboration bar. Though it is being marketed as the first collaboration bar for Teams, Microsoft introduced the concept with a Poly Studio X at Ignite 19. The Yealink is less expensive than the Poly, but requires a separate USB saucer for audio (an all-in-two solution). The VC210 works with the Yealink speakerphone CP900 saucer. I expect to see many more Android-powered huddle room solutions. The major options today are Poly Studio X, Avaya CU360, and Cisco Room Kits.

BenQ Wireless Presentation Systems: BenQ unveiled its InstaShow S line of wireless presentation systems for conference rooms. These plug-and-play systems include a receiver and HDMI transmitter buttons that allow users to share content during in-person meetings. Mobile device users can connect to the system through Apple AirPlay, Miracast, or the BenQ InstaShare app. InstaShow S WDC10, WDC10C, and WDC20 are currently available for $999, $1,099, and $1,499, respectively, according to BenQ.

In-room presentation solutions are on a collision path with video solutions. However, the latter can accommodate in-room content sharing as well as support remote participants. I expect a partnership with a firm like Logitech or Poly to address video similar to last month’s Logitech/Creston alliance.

Engagement

Fuze CCaaS: Fuze unveiled a new CCaaS solution to complement its UCaaS. I expect smaller and simpler contact centers to increasingly look to a single provider for UCaaS and CCaaS, while larger or more complex contact centers continue to source specialized premises-based and cloud solutions. This marks the third CCaaS offer from Fuze, and it intends to continue supporting its Five9 and Nice inContact integrations.

The new offer will have unified benefits including reduced app switching and simplified administration. And it will allow users to function across office and CC roles. Mobile users will be able to remotely sign in/out, pause calls, and access queue information. Fuze is positioning its new CCaaS at centers with up to 150 agents. The roadmap has additional features planned later this year.

Microsoft CDC Bot: Microsoft is working with the U.S. Centers for Disease Control and Prevention and a number of major healthcare providers to deploy a chatbot to help tackle the coronavirus crisis. The goal is to guide users through self-assessment and then escalate as appropriate. It seems like a suitable use of chatbot technology, but I keep thinking of an auto attendant on a 911 call. Microsoft's chatbot is expected to be deployed in some 30 health systems around the world. It was developed/tested on healthcare provider Providence, which reported 40K sessions, over a million messages, and 6000+ escalations.

Calabrio Becomes Flexible: Calabrio announced a deep integration with Twilio Flex. This creates a unified solution for routing and workflows, channel expansion, data capture, quality evaluations, powerful analytics, and workforce management. The integration also touts security, as both Calabrio ONE and Twilio are hosted on the same cloud computing service. It’s an interesting development for Flex, which provides a platform to build a solution, yet now offers an “out-of-the-box” engine for WFO.

8x8 Can: 8x8 announced that its 8x8 Contact Center is now GA in Canada through direct sales and channel partners. I expect 8x8 will continue to launch CCaaS services in markets that already have 8x8 X Series. The two services can be acquired standalone, but expect product and channel synergies.

6-11 of Td’s 20-in-20: This month, Talkdesk announced six more of its 20 promised enhancements for the year 2020 (bringing us to 11). We are only a quarter into the year, and more than halfway to the finish line. #Exciting.

The Explore (#6) and Studio (#7) apps received enhancements that increase flexibility and decrease dependency on IT. Talkdesk Explore uses Talkdesk iQ-powered AI along with pre-built configurable reports to predict trends and identify improvement opportunities. Talkdesk Studio is an interactive visual designer for IVR and routing design. It is a low-code, point-and-click editor.

Products 8-11 can facilitate agent-at-home options (timely) and other business continuity capabilities. The Talkdesk Flexible Deployment (#8) program can be paired with Talkdesk Guardian (#9) to protect customer data. These programs facilitate hybrid and migration models. The Talkdesk Flexible Deployment model offers several tools:

xConnect: Connects existing infrastructure to Td services.
Boost: Offers an accelerated move to Td in 15 days or less.
Hybrid Cloud: Enables internal security policies on a Td private cloud.
Regional Cloud (#10): Allows customers to select allowed Td locations or regions.
Select Cloud (#11): Offers integration options with selected IaaS providers.

I’ve been skeptical about the 20-in-20 program because some of these new features are incremental upgrades in an era of continuous innovation. Also, I don’t think 20 is a BHAG. However, Td is innovating quickly.

LogMeIn Bold360: LogMeIn enhanced its Bold360 customer engagement suite with additional AI capabilities. Bold360’s new features aggregate information from disparate systems to deliver actionable insights that help eliminate friction in the customer experience. The AI enhancements described in the announcement are vague augmented agent capabilities designed to up-level agent ability to expertly resolve customer issues and to empower agents with data. Specific new features include Dynamic Customer Information Card (allows agents to see real-time activities such as a shopping cart), Agent Statistics (insights on CSAT and other key metrics), and Visitor Blocking (halts interactions with customers who conduct themselves improperly).

Unified Communications

Avaya Cloud Office: Avaya and RingCentral jointly announced the GA of Avaya Cloud Office (ACO). The ACO offer, while currently similar to RingCentral Office in features and pricing, is differentiated by Avaya’s branding, migration tools, and Avaya’s channel program. Additionally, ACO supports several of the Avaya J Series phones. Avaya’s near-term (CY20) plans for ACO include Avaya-specific features, expansion into several new markets, additional migration tools, and expanded support for Avaya devices. I believe both vendors will benefit from increased differentiation between ACO and RCO.

Zoom Phone: Zoom announced the GA of Zoom Phone service in 11 additional countries and the beta launch of service in 24 new countries and one territory. In addition to local PSTN numbers, Zoom offers Metered and Unlimited Calling Plans now in Austria, Belgium, Denmark, France, Germany, Italy, Netherlands, Portugal, Spain, Sweden, and Switzerland. Zoom Phone beta service is available to existing Zoom customers on request. The new markets are Argentina, Brazil, Bulgaria, Chile, Colombia, Costa Rica, Croatia, Czech Republic, Ecuador, Estonia, Finland, Greece, Hong Kong (territory), Hungary, Lithuania, Luxembourg, Mexico, Norway, Panama, Peru, Poland, Romania, Slovakia, Slovenia, and Turkey. Zoom continues to expand into new markets very quickly. The company also announced a new channel program.

EPOS: EPOS (formerly Sennheiser Communications, pronounced E-Paws) unveiled new wireless headsets. The new prosumer Adapt portfolio includes four noise-canceling headsets that are undergoing MS Teams certification. The Adapt 360, 400, 560, and 660 are available for $269, $329, $329, and $439, respectively. EPOS has a very complex set of headset brands: Adapt, Impact, and Command for enterprise, and GSP for gaming. There’s also a CC line for contact centers and an MB model for “office professionals.” Evidently, office professionals don’t use Teams. There’s also a lone USB saucer in the Expand line.

Teams APIs: Microsoft introduced a call records API as part of Microsoft Graph. The API is currently in beta and provides usage and diagnostic information about calls and online meetings. The API provides information for calls made through Microsoft Teams or Skype for Business. These APIs are unsupported and in beta.

Vonage Shhh!: Vonage is now partnering with workflow platform company Whispir. Customers can use Whispir’s drag-and-drop workflow templates to use Vonage SMS, WhatsApp, and video service APIs to enable more personal and seamless interactions with customers. This is consistent with Vonage’s vision of extensible app and communications services.

Poly 4245: Poly announced the Voyager 4245 Office, a new Bluetooth headset solution with a Microsoft Teams-enabled option. The 4245 offers three different wearing styles, a swappable battery, and three-way connectivity. This makes the 15th MS Teams-certified device from Poly (4200, 5200, 6200, 8200 series). Teams users can use non-Teams-certified headsets too, but only the certified units have the ability to invoke the Teams app with a single press of a dedicated button. It can connect to desk phones, PCs, or mobile phones, and it will be available in the US, APAC, and EMEA in May 2020. This headset could simplify things, as a single model will accommodate many different use cases, though Bluetooth is not ideal in crowded environments.

Jabra Evolves: Jabra announced the Evolve2 series of professional UC headsets (Evolve2 85, 65, and 40). The Evolve2 headsets are certified for Microsoft Teams. Each model has active noise cancellation and offers up to three times the wireless range of current Evolve models. The 65 and 85 have Jabra’s signature busy light on both ear cups.

Sangoma Gets into Headsets: Sangoma is the latest comms provider to get into headsets with two new models, the H10 and H20. The H10 is a monaural, over-the-head, DECT headset designed specifically for the D-Series IP phones on a Switchvox system. It includes a noise-canceling microphone and LED indicators for status and mute. It’s available in the US first and headed to Europe. The H20, coming soon, is a USB version aimed at softphones. Head scratcher. Two headsets designed for one phone system? Two headsets or one headset and two bases? Why two bases? While I do prefer DECT myself, it seems like a Bluetooth headset would be more practical.

Messaging

Slack Refreshed: Slack more or less popularized modern enterprise messaging. Unfortunately, it was built by and for geeks. The result is an application that can be difficult for some to discover and customize. The solution was a major UI overhaul — the largest redesign in the company’s history.

The main change is better sidebar functionality, a new navigation bar, and a new compose button. The new sidebar makes it much easier to organize, nest, and collapse channels and DM conversations into logical groupings with labels. As channels increase, it can be hard to navigate and find them. The sidebar itself can be customized with colors and themes. It also has at-a-glance mentions and reactions in the sidebar. This new magical sidebar is available to paid subscribers only.

The new top navigation has an improved search capability. Other UI improvements include a cleaner channel details pane, menus, preferences, and even an increase in spacing throughout. These improvements will likely cause similar UI changes in other messaging apps that still look to Slack for innovation.

Slack to Integrate with Teams: Stewart Butterfield revealed that Slack is working to integrate with Microsoft Teams calling. As the two solutions are usually perceived as competitive alternatives, such an integration seems strange. However, Slack and Teams are not directly comparable. Teams supports meetings and telephony, but Slack does not. On one hand, this makes perfect sense. Last year Slack improved its integration with Outlook and OneDrive using Microsoft’s published APIs. On the other hand, it’s perplexing. Teams is completely closed and proprietary regarding calling — there are no APIs. Tom Arbuthnot theorizes Slack may be using the SfB loophole that could theoretically allow 1:1 voice, video, and chat federation if Slack can do a good SfB impression. Maybe the goal is to create a workable but bad integration.

Notable on Teams: Due to massive spikes in demand this month, Microsoft announced some temporary adjustments to Office 365 services. It also seemed reasonable, but this one struck me as odd: OneNote in Teams was limited to read-only (excluding EDU). Users can go to OneNote or the web for editing.

Obviously, that feature takes some horsepower. Notes and meetings go together like a horse and carriage. I’ve always felt that note-taking apps are perfect partners for video communications companies, and Microsoft’s integration of OneNote into meetings is good — and unique. I am surprised that this feature consumes so much power that Microsoft had to disable it. The recommended work-around is to use OneNote web.

Microsoft said it hasn't experienced any significant O365 or Azure disruptions, but it has seen some shortfalls in service. Of course it has — red dots on status pages were common this month for most providers.

Teams New Features: Microsoft announced three new features we can look forward to someday. A new “raise hand” feature that literally puts a hand icon atop a user’s image to indicate a desire to speak, improved noise suppression features (already found in some Teams huddle room solutions), and an offline mode for processing and drafting messages without connectivity. I like two of those. The raise hand feels like a silly skeuomorphic design. First, it’s a minor issue. There are far more urgent issues, such as an icon to indicate speaking while muted. We have moved to emotions for messages, but video remains stoic. What I’d really like to see is a participant panel with status/presence/mood indicators. Participants should be able to express things like “I need a break,” “I have a question,” “Great point,” and “You lost me.”

Also, Teams will support pop-out chats and will work with RealWear hardhat-ready headsets.

Other News

Amy Chang Departs Cisco Collab: The official story is Chang, a workaholic, wants to spend more time with her family. Cisco announced she will be taking an indefinite leave of absence, and her return to Cisco is expected, though not to Collaboration. Chang has been running CIsco Collaboration for about two years after Cisco acquired her company, Accompany. Her time at Cisco Collaboration will be primarily associated with Cisco’s expanded focus on AI-enhanced solutions, or “cognitive collaboration.” Chang made two major acquisitions (CloudCherry and Voicea), was responsible for the integration of BroadSoft, and built an entirely new leadership team.

Chang’s timing is a surprise. It’s just a month since she hosted a major analyst event where she seemed energized about the future. She departs during the largest surge in telework demand that the company (and industry) has ever experienced. Upon her arrival, she spoke of wartime management practices, but the war (against a virus) is now enabling decisions and investments to be made faster than ever. Her leave coincides with the departure of David Goeckeler, GM of Networking and Security.

SVP/GM Sri Srinivasan, previously leader of Webex, now leads all of Cisco Collaboration. However, Srinivasan will not be reporting to CEO Robbins as Chang did. Instead, the Collaboration group, AppDynamics, and other SaaS solutions will report to a to-be-named leader of a newly created Security and Applications Group. Curiously, AppDynamics previously reported to Collaboration leader Trollope.

This newsletter only includes CEO or equivalent staffing changes, and over the past few months there’s been plenty. Recent firms under new management include Cisco Collab, Poly, Serenova (Lifesize), Microsoft Teams, and Fuze.

Chief Science Officer: As a Trek fan, I’ve always felt that every Enterprise should have a Chief Science Officer, but it’s rare. The tech that we sell is limited by science, and developments in AI, quantum computing, and AR will clearly change communications and collaboration in the future. Microsoft seems to get this and has named a new Chief Scientific Officer to lead Microsoft Research. The honor goes to technical fellow and Microsoft Research director Eric Horvitz. His job is to "provide cross-company leadership on advances and trends on scientific matters, and on issues and opportunities rising at the intersection of technology, people, and society" as reported by Business Insider.

Sweet G Suite: Google revealed that its G Suite product has surpassed 2B monthly active users, but did not reveal free vs. paid users. At Google Next 2019, Google reported 5M businesses are now paying for G Suite (Microsoft reports 200M pay for O365). G Suite, part of Google Cloud, is undergoing significant changes. I am looking forward to the, now virtual, Google Next 2020 and expect updates on Chat, Meet, and Voice.

Banned Huawei: President Trump signed into law a bill banning the use of federal funds to purchase equipment from telecom companies deemed a national security threat, aka Huawei. The law marks a major effort to remove Huawei (and other Chinese companies such as ZTE) from US networks.

The Secure and Trusted Communications Act also requires the FCC to establish a $1B fund to aid the removal of such equipment in smaller telecom groups. The Rural Wireless Association (RWA) estimated in 2018 that around 25% of its member networks use some equipment from Huawei or ZTE.

Concerns around Huawei stem from a 2017 Chinese intelligence law that requires companies and citizens to assist in state intelligence work if/when requested. This includes sharing of data and information. The problem is that Huawei is a major supplier of 5G equipment. This will benefit Nokia and Ericsson, but there’s no American company positioned to fill the void.

In a connected society, our networks and devices can be used against us. When the courts tried to force Apple to unlock a phone, we learned the tech simply does not exist to break modern encryption. However, Apple could have updated the phone with weaker encryption. Thus, if the Chinese government wanted to monitor or break a foreign network, it theoretically could force Huawei to weaken security via upgrades. Of course, the same could be said for the US regarding American-made gear.

Note: The new Huawei P40 smartphone has US parts despite the ban.

The New iPad:

A clear theme emerged in my newsletters last year about how new operating systems (iOS, Android, and ChromeOS) are ending the Windows and MacOS duopoly. I still believe this to be true, but it’s taking longer than expected. Neither iOS nor ChromeOS have evolved quickly enough, and the Android tablets are very weak. Meanwhile, Microsoft has joined the race by reinventing Windows for ARM (Surface Pro X).

The new iPad Pro is a small step in the right direction. The big breakthrough is a trackpad that helps adapt it to existing workflows. It also has a beefier processor and more robust camera with LIDAR. The new iPad is better than the older model, but not the leap I wanted. It’s a shame they didn’t upgrade the front camera. Also, the LIDAR could be a useful feature on the front for improved security and virtual backgrounds. LIDAR on the rear-facing camera is presumably for potential AR applications.

For me, the Chromebook still wins for travel. I require Chrome extensions and being able to use the camera at the same time as other apps. Also, the new Chromebooks have a 1080 camera, and the iPad is still stuck on 720. Though I have to say the Surface X is a contender. Fortunately, travel has temporarily ceased, so no urgent decisions are necessary. The future is ARM, but the future isn’t cheap or terribly useful yet.

365 Subscriptions: To attract more consumers, Microsoft announced changes to its personal and family subscription packages. Like many of us this month, it dropped “office” from its concept of productivity. New “Microsoft 365” plans for Personal and Family will be available on April 21, priced at $7/mo and $10/mo (for up to 6 users), respectfully.

Microsoft appears to be positioning Teams as a replacement for consumer Skype. Teams will soon let friends and family connect in a group chat or video call and share content. A new Family Safety app sends notifications when a family member leaves home, work, or school. Perhaps this is a response to my informal observation that college graduates are more savvy on GDocs than Office. Kid1 asked me if we can set up a family Yammer feed.

US Tracking Phones: It may have been former President Barack Obama’s chief of staff Rahm Emanuel who advised his boss to “never let a good crisis go to waste,” but the mantra has been embraced by politicians around the world. The coronavirus is unleashing a massive wave of global government surveillance.

The US government (through the CDC) and state and local governments have started to receive presence and movement information from cell phone data. The near-term aim is to create a portal for federal, state, and local officials that contains geolocation data in what could be as many as 500 cities across the US. Several new bills have been introduced that require providers to scan content, making encryption technologies unusable (EARN IT Bill and Graham-Blumenthal Bill).

Financial News

Deepgram: Deepgram, a startup focused on high-quality, real-time speech recognition, announced a $12M Series A this month. Deepgram was featured in the Innovation Showcase at EC18. Instead of trying to improve existing tech, Deepgram built a deep learning tool that’s more accurate than many alternatives. Deepgram targets enterprise call centers. For additional information, check out this TalkingHeadz interview with CEO and founder Scott Stephenson.

Is There Anybody Out There? I think the Financial News section of this report will be a bit light for several months. The coronavirus has investors fleeing from early-stage startups as fears increase that the pandemic will trigger a global recession. SeedLegals, a London firm that specializes in legal advice for smaller startups, said the number of venture capitalists participating in early-stage funding rounds for startups dropped by 28% in March.

Acquisitions

Genesys and nGUVU: Genesys acquired nGUVU, a privately held software provider based in Montreal. The stated goal is to add AI-powered gamification into its WEM suite. nGUVU uses ML and behavioral analytics to improve employee engagement and performance. 93% of nGUVU’s customers utilize Genesys solutions. Genesys intends to leverage nGUVU in its multi-year effort to unify its three separate WEM solutions into one suite. I expect every CCaaS provider to invest heavily in WFO/WEM, as these capabilities move from adjacency to core.

OpenText: OpenText acquired XMedius for $75M in cash, which was less than 2x annual revenues. XMedius generates about $40M in annual revenue. There are some possible synergies with OpenText’s Customer Experience Management (CEM) and Business Network (BN) platforms. OpenText is now a self-proclaimed leader in secure information exchange, unified communications, and digital fax. The deal comes roughly three months after OpenText acquired Carbonite and Webroot for $1.45B. One of XMedius’ more intriguing solutions is TeamQ for small team call centers on MS Teams.

Lifesize and Serenova:

Lifesize announced a merger with Serenova that creates a “contact center communications and workplace collaboration company” with over 10K customers. The unusual partnership is the brainchild of a major common investor: Marlin Equity Partners, an investment firm that has over $6.7B of capital under management. It has committed to further investment in the combined business. It also intends to stay involved with its go-forward strategy. Craig Malloy, founder and CEO of Lifesize, will serve as CEO of the new company. Serenova CEO, John Lynch, returns to the role of SVP of Sales.

Modern enterprise communications tend to include Telephony, Meetings, Messaging, and sometimes Contact Center (though CC is often acquired separately). This unusual combination unites CCaaS and Meetings, which happen to be the two most exciting components. On the logical side, the two companies both have roots in Austin, Texas, both utilize AWS, and both are covered in separate Gartner MQs. Neither firm seemed likely to be acquired, so perhaps the combination makes sense. But it feels like a two-wheeled tricycle. Customer benefits of this combined portfolio are not immediately apparent. Neither terms nor expected financial synergies were disclosed.

Zayo: The Zayo Group is a private company again. Its new owners, global investment firms Digital Colony Partners and the EQT Infrastructure IV Fund, officially closed on their $14.3B acquisition this month. That’s $35/share, which, when announced last May, was a 32% premium over the stock’s weighted six-month average. The company is still headed by CEO and co-founder Dan Caruso and remains based in Boulder, Colorado, with 1150 employees. Caruso was also a co-founder of Level 3, now part of CenturyLink.

Microsoft Affirmed: Microsoft made a move into mobile network systems this month by agreeing to acquire Affirmed Networks for an estimated $1.3B. Affirmed makes tech to help mobile operators manage their networks, and that sector is slowly but inevitably moving away from “big iron” to software-based commodity hardware. Affirmed Networks helps build virtual networks using 5G. This is an Azure/cloud play likely inspired by Huawei. Microsoft has been building its cloud computing operations through acquisitions. In 2018, it bought privately held GitHub for $7.5B. Affirmed Networks was founded in 2010 and had raised about $240M.

Both Amazon Web Services and Microsoft see big potential in connecting edge devices using 5G wireless technology to the cloud. Last year, AWS took the wraps off its Wavelength platform for ultra-low latency apps for 5G devices. On March 31, Microsoft's Azure team is doing something similar with its Azure Edge Zones.

This Month’s Goodreads

Upcoming Events

April

Enterprise Connect (Postponed)
Google Next (Postponed)
Avaya Analyst Event (Postponed)
Atos Analyst Event (Virtual)

May

Talkdesk Opentalk (Virtual)
Metaswitch Forum (Canceled)
UC Expo (Postponed)
Genesys Xperience 2020 (Postponed)
Twilio Signal (Postponed)
8x8 Analyst Event (Postponed)

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The TalkingHeadz Podcast featured two interviews in March: Murali Sitaram of Microsoft Yammer and Craig Walker of Dialpad. There was also a Feb news Insider recap voicemail podcast. Subscribe to the TalkingHeadz podcast on your favorite app.

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By Dave Michels

Dave is an independent analyst and founder of TalkingPointz which is focused on enterprise communications. In addition to this (free and paid) content on TalkingPointz, he contributes to industry sites, can be found at major industry events, and provides advisory services to vendors and financial analysts.